Sometimes the updates on this blog are few and far in between and this update, in particular, is long overdue. The main focus of this entry is how I went back to the student loan well to fund my doctoral education, which ended in May 2018. In fact, the last update that I made to the Student Loans category of this blog was a note about how I was going back to school to get a doctorate and I posted that updated in June 2015.

Graduating from the USC Rossier School of Education last spring

Well, that doctoral program has come and gone and I absolutely loved it. Soon, I intend to post an entry talking about the tremendous experience that I had as part of the University of Southern California’s online doctoral program. It was amazing and really rewrote the entire online learning experience for me. Again, though, that story is for another time. This update is about student loans.

To start, I do not intend to write a series of updates about my student loan repayment experience like I did after I graduated from Monmouth University and Rutgers University some 10+ years ago. Writing about my on-going repayment of the $120,603.31 in student loans that I incurred getting a bachelor’s degree and master’s degree was fun, but I have already provided that type of content to this blog and I do not want to write about the same issue in the same manner again. Also, my personal circumstances during this repayment are much different than they were back in 2006 when I started that repayment program. When I started repaying my first set of loans back in July 2006, I did not even have a full-time job yet. Now, I have two full-time jobs and two thriving small businesses… so yeah, my situation is a little bit different.

What is also different is the amount of student loan debt that I needed to incur to complete the doctoral program. All in, I took on $89,286.86 in new student loans. This number is comprised of $87,360.16 in loan principal, $1,878.84 in capitalized interest, and $47.86 in closing and refinancing fees. For those of you keeping count, when you combine all of the student loan principal, capitalized interest, and closing and refinancing fees that I have had to pay off in my lifetime, that number is $209,890.17.

Pretty amazing, right?

Just for fun, if you want to add in the $28,851.81 that I have already paid in interest during the first set of student loans, then the total amount that I have repaid and am still tasked with repaying is $238,741.98.

In terms of repayment, the first set of student loans took me seven years and one month to repay in full. Those seven years did not necessarily go by quickly in terms of financial time. In other words, repaying those loans was brutal to a young professional just getting his career started – in the nonprofit sector no less. Today, my repayment plan is a little bit different as my first payments began in December 2018 and I expect to have these loans paid in full sometime around the end of 2020 or the beginning of 2021. My estimates are still somewhat off because I am unsure if I want to repay the loans earlier and, to be honest, I am contemplating a few different repayment structures that make more financial sense. Unfortunately, my income is at a point where I can no longer write off my student loan interest as a deduction on my taxes, so paying interest on the student loans really has no financial benefit at all.

But there are other ways to make student loan interest work for you. For example, I own a home now and I have a good deal of equity in the home. If I refinance my student loans into my mortgage, then the interest incurred on the increased amount of the mortgage loan would be tax deductible (up to a point, given the recent state and local Tax limits). Also, I could take out a loan from my 401k and repay my loans that way, too. By doing that, 100% of the interest paid on the 401k loan would go back into my 401k and I would earn all of the interest paid. Either one of these options seems like a better choice than just making payments on the student loans.

That is about it for this student loan update. Again, no regular updates on my repayment this time around, but I might post a random update here and there, so be on the lookout!

You may remember way back to the beginning of March when I defined what the “next big goal” of my student loan repayment plan would be. For those of you that might have forgotten or who don’t want to take the moment to click back on the link above, the goal was to break the $30 thousand barrier with my New Jersey Higher Education Student Assistance Authority (NJHESAA) student loan.

The Next Big Goal Achieved!

Today, I can happily announce that this goal has been achieved! 🙂 But let’s not spend too much time celebrating and being happy. No, in fact I want to take this chance to define what my next goal will be with this repayment (some of you might be able to guess this goal). With today’s announcement that my NJHESAA student loan debt is down to $30 thousand, that leaves a total of $85 thousand of total student loan debt that I have left outstanding to repay. The next goal is to break the $80 thousand barrier in terms of total outstanding student loan debt.

But wait! I’m going to add a twist to this goal. According to my projections, I should reach this goal by August 1, 2010. Well, I want to accelerate that a little bit. I’m going to create an even stricter time limit on reaching the next goal – I want to reach it by July 15, 2010. In the world of paychecks and balancing personal budgets, reducing a projection by two weeks is a monster goal to achieve.

Let’s see if I can get it done.

In the mean time, everyone out there in JerseySmarts.com land should feel free to raise a glass to fighting for one’s financial freedom from student loan debt. It can be done and I intend to do it!

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. I currently owe $85 thousand, which breaks down to $30 thousand owed to the New Jersey Higher Education Student Assistance Authority and $55 thousand owed to the United States Department of Education. Follow my student loan repayment story on JerseySmarts.com.

Today is a good day – and not just because the spring weather feels good and it’s a nice day outside. No, in fact today is a good day because my student loan debt has dropped from $88 thousand to $86 thousand. That’s not a typo either, folks. After getting my federal tax return at the beginning of this month, I decided to apply a large portion of it towards paying down my New Jersey Higher Education Student Assistance Authority (NJHESAA) student loan.

The result? A $2,000 check going from my checking account to NJHESAA’s coffers and the reduction of my NJHESAA student loan debt from about $33 thousand down to about $31 thousand. Since I’ve now reached approximately $31 thousand in my NJHESAA student loan debt, I can now officially say that in 2010 I’ve repaid about $10 thousand of this loan…so far.

A Double Drop This Time

That’s a significant reduction – very significant. For a quick example of how significant this $10 thousand reduction has been in real terms consider this: As of January 1, 2010, I was paying $8.23 per day in interest alone on this loan. Over the course of a year, that’s $3,003.95 in interest expenses. Gross. Today, I am accruing interest at $6.40 per day or $2,336 per year. Annually, the difference in projected interest costs is $677.95. That’s a lot of money – and I’m only less than four months into my hardcore repayment strategy for the NJHESAA loan! So how much have I paid in interest thus far this year? $769.43. My goal is to keep that amount as low as possible.

Before I wrap this gloat session up, I feel compelled to add that this whole repayment thing isn’t easy. It is fun to write these entries, but repaying so much of this loan so quickly is not easy.

Remember, I created a very strong, very strict repayment plan because I want to get rid of the burden that these student loans cause me both today and tomorrow (and that “tomorrow” part is critical). An essential part of that repayment plan is focusing on wants versus needs…and it’s not easy or enjoyable to make that decision of what I want versus what I need. It’s not easy denying myself what I want to do with my paychecks versus what I really know that I need to do with those paychecks. I really want to take the approximately $2,750 that I spend on student loans each month and put a few hundred into my savings account and a few hundred into my brokerage account and then spend the rest of the money living the type of lavish lifestyle that you see on television. I’d love to do that – I’d love to go out and buy new clothes every few weeks instead of once or twice per year. I’d love to give my Mom back the small Honda Civic that I’ve been “borrowing” from her for almost two years and, instead, go out and buy a brand new hybrid SUV that would give me the roomy drive that I want and the gas mileage that I need. And I would love to travel more (like my recent trip to Nashville).

But I know that I don’t need to do those things. In fact, even more than knowing that I don’t need to do these things, I know enough about money and daily compounding interest to know that engaging in my wanted activities listed above instead of paying off my student loan debt would be condemning my future to a life of bloated student loan payments. Screw that! I’ll make the sacrifices today to make sure that tomorrow is absolutely awesome, thank you very much!

Oh, and now would be a good time to remind everyone of the “next” big repayment goal which I set for myself during the first week of March. Go ahead, click over and take a read.

I’m getting there…

In May 2006, I graduated from Rutgers University with a Masters Degree and $120,720 in student loan debt. I currently owe $86 thousand, which breaks down to $31 thousand owed to the New Jersey Higher Education Student Assistance Authority and $55 thousand owed to the United States Department of Education. Follow my student loan repayment story on JerseySmarts.com.

Only about a week ago I uploaded an entry talking about how my outstanding student loan debt fell from $98 thousand to $97 thousand. Well, one week later I’m glad to report that my debt has fallen from $97 thousand to $96 thousand. Last week I said that I have a plan to pay off this student loan debt quickly and efficiently. As you can tell from this entry, I’m working that plan to the best of my ability.

I have two student loans left: an NJHESAA consolidation loan and a Direct Loans consolidation loan. The Direct Loans consolidation loan is operated out of the United States Department of Education and carries a 4.75% interest rate on it, so it’s not the worst piece of debt in the world. The NJHESAA loan, on the other hand, sits at 7.33% interest which is too high for my long-term financial planning. Paying about $8.50 per day in interest expenses is ridiculous. As such, the plan to pay off of my student loans quickly focuses mostly around the NJHESAA loan where I have about $41 thousand outstanding.

My plan for the coming year is to send as much excess money as I can to pay down the NJHESAA loan. Once I get it down to a manageable level (unfortunately, $41 thousand is not manageable) my plan calls for me to revisit my savings and investment accounts to see whether my aggregated funds can finish off this loan and still leave me with some playing money.

I imagine that once I can get the NJHESAA loan down to $20 thousand or so, I’ll be able to give some serious consideration to wiping it out with one payment. And, if I continue to stick to my plan, then I might be hitting that number right around this time next year…

Stay tuned as the $96 thousand left on my student loans continues to shrink!